Cheap accommodation in Portugal used to mean staying at 'pensão' or 'residências', which are small family-run properties. Now, with a lot more hostels opening throughout Portugal, travellers have more of a choice than ever before.

Hostels.com features 692 hostels in Portugal at the moment.
Hostelling International looks after quite a few Portuguese hostels and most of these are open all year round. However, some hostels in Portugal do have periods during the winter months where they're closed to visitors.
It's a good idea to make a reservation before you arrive at any of these hostels. And remember that, for the most part, hostels in Portugal are non-smoking.